Back in September 2018, the Winklevoss Twins got the green light to launch their very own USD pegged stablecoin – the Gemini Dollar (GUSD). It was touted as the first of a new breed of USD stablecoins, completely regulated by the New York Department of Financial Services (NYDFS).
Since its inception and all-time high supply level of $103.106 million, GUSD supply has fallen to a lowly $8 million – down just over 92%. While GUSD has been falling apart, other stablecoins have been booming – reaching new all-time high supply levels.
Is Gemini The Problem?
As far as stablecoins go, GUSD is a fairly run of the mill, no-frills offering. However, it’s tied to a crypto exchange that reports rather low levels of trade volume. If there aren’t many traders on the platform, then it makes sense that GUSD isn’t seeing as much use as other stablecoins. For example, Tether (USDT) isn’t tied to one exchange, meaning crypto traders around the globe can buy USDT and deposit it on virtually any crypto exchange. GUSD doesn’t have this luxury and this could be part of the issue. Sure, Liquid has listed GUSD, but as of press time there is zero trade volume for both GUSD trading pairs.
Earth to Gemini, We Need More Trading Pairs
Low trade volume aside, Gemini has managed to achieve an accolade that no crypto exchange wants – the slowest exchange to add new trading pairs. Due to the fact the Winklevoss Twins want their exchange to be uber-regulated and run everything by the NYDFS, it takes a very long time to add new trading pairs.
Currently, Gemini only has trading pairs for Bitcoin, Ethereum, Bitcoin Cash, Litecoin, and Zcash – that’s barely anything on the grand scheme of things. While some might argue that less is more and that this is better for newcomers to the crypto world, there are far more people out there that want to trade other tokens. This addiction to regulation is no doubt the source of Gemini and GUSD’s issues.
Crypto is Booming
Over the same period of time, Bitcoin is up more than 230%. Tether has been printing more USDT tokens every week to keep up with trader demand and other exchanges have begun creating their own stablecoins. The entire crypto market is on the up and other stablecoins are increasing their supply levels, not decreasing it. This could be a huge warning sign for GUSD holders and Gemini users. If Gemini fails to get its broker-dealer license from the Financial Industry Regulatory Authority (FINRA) or it turns out to be unpopular, then we could see Gemini slink away into the shadows.
Hopefully, Gemini can break through this painful year, but as Gemini is sat resting while it waits for its broker-dealer license we aren’t going to see any improvement. Gemini is sinking all of its eggs into one basket in hopes of turning its fortunes around. The GUSD looks very much like it’s going to become a long-forgotten stablecoin.